My personal financial goals shifted dramatically when I recently turned 40. Not only did my financial priorities change, but my attitude about making and keeping my money also transformed. I'd like to think I have a more mature and realistic view of my financial situation. My future goals are better defined. And I know better how to reach my goals, including having a passive income stream.
Changing my 'just charge-it' philosophy
In my 20s, I ran up a lot of credit card debt. My philosophy was that I had to use credit cards to make up for my lower salary. I figured I'd eventually make more and pay off my debt. In my 30s, I was stuck dealing with the mistakes I made in my 20s as far as overspending and putting my whims on my charge cards. Since I turned 40, I view all debt as bad debt. I pay off my credit card balance every month. I don't buy anything unless I can afford it.
Getting closer to my home ownership dream
My dream in my 20s was to be able to buy a home with a mortgage. In my 30s, I worked as hard as I could to pay extra on my mortgage. Since I turned 40, I am finally able to see the end in sight. I realized my real dream wasn't just to own a home, but to own a home outright without a mortgage payment every month. Because I paid often and early on my mortgage, I should be mortgage free by the time I'm 49.
Helping my children reach their goals
My children were just babies when I was in my 20s. My only financial goal was to make sure they had the necessary shelter, food and healthcare needed to survive. It didn't cost any money to shower them with love or take them to the public library or recreational centers for enrichment. In my 30s, I spent the typical amount of money a parent spends on their children. Now that I'm 40, I am more focused on making sure my sons achieve their higher education and career goals. I want to make sure they have the tools they need to become financially independent.
Preparing for retirement
I saved barely any money for retirement in my 20s. In my 30s, I watched as my 401(k) balance gradually increased a few hundred at a time. My husband and I began to pick up our pace on retirement savings efforts in our 40s. We also made a decision to stop trying to keep up with the Joneses by buying a step-up home. Our single-family home will be sufficient as we retire in another 25 years. In addition to having a paid-off home, we hope to have $1 million combined in retirement savings. Although it's a lofty goal for us, it's doable because we are focused.
When we reach 50, I think we will want to slow down a little. I'm hoping to have residuals, dividends and other passive income coming in by the time I'm 50. It seems the 40s are the prime working years when everyone in the family needs to hustle so that retirement dreams are also doable.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More from this contributor:What We Gave up to Get Our Dream Home